Morning Bell

• CIT Group aims to reduce debt via bankruptcy filing
  In its bankruptcy filing, CIT Group listed assets of $71 billion and liabilities of nearly $65 billion. The lender said support from its bondholders should make it possible for the company to quickly exit court protection. "Short term, it's going to cause some difficulties for startups and smaller borrowers," said Jean Everett, a partner at Hiscock & Barclay. "CIT lent across so many sectors it's sort of difficult to predict how it'll affect each sector." Bloomberg (11/1) , Financial Times (tiered subscription model) (11/2) , Reuters (11/2) , The New York Times (11/1)

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Video View

• Traders see dollar inverse to stocks
  Traders are moving nervously in and out of stocks, dollars, corporate bonds and gold, analysts said. A large supply of cash available, because of quantitative easing by the Federal Reserve, created this trading. Last week, the Dow Jones Industrial Average went up and down a 400-point spread, finally closing down 249.85 points Friday. Meanwhile, the dollar index finished 0.5% higher. "We've got this very unstable situation in which Fed policy is dictating the behavior of so many assets," said Dean Curnutt, president of Macro Risk Advisors. "The dollar is at the nexus of this." CNBC (10/30) , The Wall Street Journal (11/2)

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Industry News

• SIFMA survey: Q4 Treasury issuance to hit $444.5 billion
  A SIFMA survey found that the Treasury is expected to issue $444.5 billion worth of bills, notes and bonds this quarter, up from $392.5 billion in the third quarter. In the fourth quarter of last year, the Treasury sold $569.3 billion in bonds, notes and bills. The department issued $14 billion worth of Treasury Inflation-Protected Securities during the third quarter and is expected to maintain that level this quarter. Bloomberg (10/30) , The Wall Street Journal (11/2)

• Stock trading, financial hubs continue to evolve
  In the late 1700s, brokers gathered near a buttonwood tree in New York to trade stocks. By 1817, traders had moved indoors, and in 1903, they settled the New York Stock Exchange at Wall and Broad streets, where it still stands. Electronic markets have emerged, resulting in much trading in cyberspace. The evolution of stock trading raises questions about whether New York continues to make sense as a financial center. Duncan Niederauer, head of NYSE Euronext, said that depends a lot on lawmakers in Washington, D.C. The Wall Street Journal (10/30)

• NYSE Euronext attracts investors to NYSE Liffe U.S.: NYSE Euronext's attempt to develop a futures exchange to compete with CME Group received a boost, with the trans-Atlantic exchange signing up a handful of investors in its U.S. division of futures exchange NYSE Liffe. Citadel Securities, Getco, Goldman Sachs, UBS and Morgan Stanley agreed to buy equity stakes in NYSE Liffe U.S. Financial Times (tiered subscription model) (10/30)

• Goldman in negotiations to buy tax credits from Fannie Mae
  Fannie Mae could receive some financial respite by selling millions of dollars in tax credits to Goldman Sachs, but the Treasury opposes the deal and could block it. The Obama administration is concerned about the agreement, which would help the investment bank lower its tax bill. The "Treasury is reviewing and will not let it proceed unless it is clearly in the taxpayers' interest," said department spokesman Andrew Williams. The Wall Street Journal (11/2)

• Commentary: Supreme Court case could hurt mutual fund investors
  A case to be argued before the Supreme Court should raise concern for mutual fund investors, writes former Securities and Exchange Commissioner Paul Atkins. The case could take the power of setting a fund's fees from independent directors and give it to judges. "Judges have much on their plates and little practical expertise to guide them," Atkins writes. Read SIFMA's amicus brief filed in Jones v. Harris Associates. The Wall Street Journal (11/1)

• Other News

• Analysis: Banks' dependence on short-term financing needs attention
  The Wall Street Journal (11/2)

• Source: BNY Mellon's Kelly not interested in becoming BofA CEO
  The Wall Street Journal (11/2)

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Regulatory Roundup

• SEC to look into retirement products
  At SIFMA's annual meeting, Securities and Exchange Commission Chairman Mary Schapiro said the agency will start scrutinizing retirement-related investment products. "Issues related to disclosure, product development and marketing for retirement products will be areas of focus in the coming year," Schapiro said. She also reiterated her stance that the regulatory regime for investment advisers and broker-dealers should be "harmonized" and a common fiduciary standard should apply. InvestmentNews (11/1)

• Fed starts to develop plan for boosting interest rate
  With economic recovery appearing to take hold, officials at the Federal Reserve are discussing how to unwind stimulus programs without tipping the country back into recession or spurring inflation. In a policy meeting this week, Fed officials will discuss the timing of tightening monetary policy, how they will do it and how they will communicate it to markets. The Wall Street Journal (11/2) , Reuters (11/1)

• Other News

• SEC in settlement talks with financial firms regarding muni contracts
  The Wall Street Journal (10/31)

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Featured Content

SIFMA News

• AFME: A new trade body for Europe
  As regulation of financial markets takes on an increasingly global dimension, the London Investment Banking Association and the European operations of SIFMA joined forces to form the Association for Financial Markets in Europe. Former affiliates of SIFMA -- the European Covered Bond Dealers Association, the European High Yield Association, the European Primary Dealers Association, the European Securities Services Forum and the European Securitisation Forum -- will be integrated into AFME's business-policy divisions. Learn more.

• Back-to-school night: Reception provides preview of 2010 Securities Industry Institute
  Class was in session early on the evening of Sept. 23 when faculty from the Securities Industry Institute, the premier executive-education program for the financial services industry, provided industry practitioners a sample of what the program has to offer. Hosted by SIFMA and held at the SIFMA Conference Center in New York City, the program allowed attendees to listen to three faculty members, including Jeremy J. Siegel, talk about their perspective on markets, leadership and regaining trust. Learn more about the reception and the 2010 Securities Industry Institute.

• Learn about SIFMA's advocacy efforts for OTC derivatives

• News, hearings and more affecting Private Client issues

Technology

• JPMorgan enhances securities-lending dashboard
  JPMorgan Chase updated its securities-lending dashboard, making it more customizable and boosting transparency. The enhanced tool allows users to focus on a variety of metrics. The bank said changes were made in response to user demands. "Over the last year, clients have significantly increased their oversight of securities-lending activities both in terms of the breadth of things they are looking at and the depth at which they are reviewing them," said Paul Wilson, a JPMorgan executive. AsianInvestor.net (11/2)

Hot Topics

Top five news stories selected by SIFMA SmartBrief readers in the past week.

• Commentary: Myths about Wall Street pay policies persist (The Washington Post)

• Congress, White House will address "too big to fail" (The New York Times (free registration))

• Geithner expects more banks to return rescue money soon (CNBC)

• Geithner wants government to have power to shrink even healthy firms (CNBC)

• Goldman Sachs defends market practices in report to SEC (Bloomberg)

• Results based on number of times each story was clicked by readers.

Investor Trends

• Analysis: Banks with strong loss reserves likely to be good investment
  Investors can still profit by investing in bank stocks, despite a strong rally in the sector during the past several months. Columnist Peter Eavis suggests that investors buy stocks of lenders with strong reserves against future loan losses. During the past 12 months, JPMorgan Chase, Bank of America, Citigroup, U.S. Bancorp and Wells Fargo have put billions of dollars more into bad-loan reserves than they would during a healthy economy. As provisioning declines, the banks should see a boost to earnings, based on the difference. The Wall Street Journal (11/2)

SmartQuote

Accept the challenges so that you may feel the exhilaration of victory." --George S. Patton Jr., World War II general